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Exports drop for 4th straight month

CHINA'S exports slumped for the fourth consecutive month in February, putting heavy pressure on the central government's economic growth goals for this year.

Imports fell as well, in a disappointing end to a trading month buffeted by the global financial turmoil.

"Exports in February were much lower than estimated, pushed by a faster-than-expected decline in the world economy," said Chu Jianfang, an analyst at CITIC Securities Co.

"The dropping currencies in some countries and the emergence of protectionism will greatly dampen China's exports. We expect exports will remain in double-digit decline in the first half of this year, as the economies of developed countries will continue to worsen," Chu said.

Exports plunged 25.7 percent on a yearly basis to US$64.9 billion last month, deepening from a 17.5 percent decline in January and a 2.8 percent decrease in December, the General Administration of Customs said yesterday.

The combined export figure for the first two months dropped 21.1 percent to US$155.33 billion, compared with 16.8 percent growth a year earlier. Economists were waiting for the February figure so they could eliminate the effects of the Spring Festival holiday, a week-long hiatus with fewer work days that usually depresses financial figures. The holiday fell in January this year and February last year.

"The downward trend in exports won't change while the exterior environment continues to worsen," said Zuo Xiaolei, an analyst at Galaxy Securities Co. "But the slower decline in imports was a positive signal, which may reflect a rebound in domestic demand."

Imports fell 24.1 percent to US$60.05 billion last month after a drop of 43.1 percent in January, and the trade surplus narrowed to US$4.84 billion, well below the US$39.1 billion in January, the administration said.

Combined imports for the first two months declined 34.2 percent to US$111.4 billion, compared with 30.9 percent growth a year ago.

The European Union remained China's biggest trading partner with total trade volume of US$48.78 billion for the two months, dropping 20.2 percent from a year earlier.

Trade between China and the United States declined 17.4 percent to US$39.43 billion in the period, making America the second-largest trade partner followed by Japan.

"The disappointing foreign trade numbers must be a blow to policy makers who are reassuring the nation during the National People's Congress that China is on track to book strong annual growth of 8 percent," said Sherman Chan, an economist at Moody's

"Local manufacturers will continue to feel the squeeze brought on by a contraction in global consumption, and pressures on the government to quickly roll out fiscal stimulus projects will intensify."

Commerce Minister Chen Dingming said on Monday the outlook for China's foreign trade will remain "grim" in the coming months as many problems in the US financial system have yet to be exposed and financial difficulties are rising in Europe.

The country has raised export tax rebates on a range of products, and plans to steadily cut its export taxes all the way to zero.


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